Palantir's blowout growth... The value of AI freedom... New all-time highs are here again... A reason to believe in a new leg higher... However, stay aware of risks...
Turns out, freedom is just as valuable in the digital world as it is in real life...
Today, shares of enterprise software company Palantir Technologies (PLTR) soared nearly 30% on a blockbuster earnings report.
After yesterday's closing bell, Palantir reported 93% year-over-year total revenue growth of nearly $2 billion in the second quarter, chalked up primarily to demand for its "sovereign" AI solutions among U.S. businesses.
These are tools that allow businesses to run their existing systems independently while also integrating new AI technology. So companies don't have to hand over the keys to their intellectual property and datasets to the likes of OpenAI, Anthropic, and Alphabet (GOOGL).
Palantir reported 149% revenue growth from U.S. commercial business, and CEO Alex Karp said it looks like the momentum will continue for at least 18 more months, with more than $6 billion worth of deals in the company's pipeline.
Karp wrote in a letter to shareholders...
The revolution for independence and AI sovereignty is now well underway.
Every organization in the world is awakening to the risks of handing the creators of the language models the keys to their institutions, of letting the models loose within their homes.
The demand from our partners is clear.
It is for control over data, the prompts that the models ingest, and more fundamentally the organizational and business intelligence, their alpha, that the language labs are not only ready and willing, but structurally designed to capture from their customers.
Palantir's clients include Morgan Stanley (MS), Tyson Foods (TSN), Merck (MRK), and many others. Its largest client is the good ol' U.S. government, which paid the company around $2 billion in 2025.
Specifically, Palantir offers businesses something called the Sovereign AI Operating System ("AI OS"), which was co-designed with Nvidia (NVDA). It combines Nvidia hardware with Palantir's software to run secure data centers.
A core layer of Palantir's AI OS is its user-facing Artificial Intelligence Platform ("AIP"). Stansberry Research senior analyst Josh Baylin wrote about this platform in a special report when he debuted his Mosaic Trader advisory back in April...
Palantir's AI platform lets enterprise customers trust AI.
Government agencies, for instance, aren't allowed to simply upload classified data to a third-party like ChatGPT. They need the privacy of their own servers.
AIP lets them integrate AI agents (virtual assistants that can complete tasks without human intervention) and other AI services into their own, privately-operated networks.
Importantly, Josh's unique trading system flagged Palantir as a company favored by developers who work hands-on with these tools. "Real people in the real world are getting behind this idea," Josh wrote.
Palantir's earnings report shows the potential for software businesses to make money from AI, in addition to the companies creating the technology. Palantir's stock had been down about 30% this year... before surging by that same percentage today.
Of course, not every software company will be a winner, but the point here is that the AI boom is still developing, and companies are figuring out ways to use AI to become more efficient and productive.
It's not a coincidence that we're also seeing one of the best-performing earnings seasons in years. Around 85% of reporting S&P 500 companies have beaten expectations, according to FactSet. So the bull market remains resilient.
All-time highs are here again...
Yesterday, the Dow Jones Industrial Average hit a record high. Today, it was the benchmark S&P 500 Index that set a new record, after posting a nearly 2% gain. The small-cap Russell 2000 is almost at a new high, too. And the tech-heavy Nasdaq Composite Index – up close to 3% today – is headed in the same direction.
The AI ecosystem catching another wind was just part of the story... The other was another proposed "deal" to reopen the Strait of Hormuz.
We're as tired as anyone of the on-again, off-again nature of the conflict with Iran, but we remain committed to following it because, well... the supply of oil – a real and important asset – and other commodities matters to the global economy and markets.
Any "Iran risk off" news is being treated like a tailwind for stocks right now... and Treasury Secretary Scott Bessent delivered that gift this morning when he went on CNBC and said "there is a chance" of a new agreement being reached today or tomorrow.
Oil futures plummeted by about 5% for a second straight day.
Meanwhile, what we see as a healthy stock market rotation continues. It wasn't just the market-cap-weighted S&P 500 that hit an all-time high today. So did the S&P 500 Equal Weight Index, with about 360 of the 500 stocks higher.
This roughly 2-to-1 ratio of daily gainers to losers has been common lately, which coincides with an upward move in one of our favorite indicators of market health – the advance/decline line. As our colleague Brett Eversole wrote in DailyWealth this morning...
The advance/decline line takes a daily total of the number of rising stocks minus the number of falling stocks. Each day's number adds to the previous day. This creates a cumulative series that rises if more stocks are rising than falling.
The key part to watch is how this measure performs versus the market. Specifically, if the market is hitting new highs and the advance/decline line isn't, that's a warning sign... We don't want to see only a few stocks leading the market higher.
That was the case a few months ago. But now, the situation has reversed. The advance/decline line recently broke out, while the S&P 500 Index remained below its all-time high. Take a look...
This is a good sign for market health. It's not just a few highfliers leading the rally. Most stocks are rising together... which means the market is healthy.
For example, today, the financial sector of the S&P 500 made a new high... on the same day AI names were among the biggest winners.
As Brett pointed out, this recent "breakout" in the advance/decline line indicates that the overall market should move higher in the months ahead, based on history...
To see it, I looked at each instance when the advance/decline line reached a one-year high while the S&P 500 was 3% or more below its one-year high. That has happened 12 other times since the data begins in 2002. Here's what happened next...
As Brett wrote, that's healthy outperformance. Plus, stocks were higher a year later 100% of the time after these prior setups. That's an "all clear" signal, Brett says. So he's remaining bullish and staying long.
Staying aware...
This isn't to say there aren't risks. There have been plenty of cautionary tales. The latest, as the market makes new highs, is the recent implosion of the ironically named hedge fund Situational Awareness.
It's run by 20-something Leopold Aschenbrenner. Our Whitney Tilson, a former hedge-fund manager himself, covered the story in his free daily letter on Friday and yesterday. As Whitney wrote on Friday...
The fund was up 439% year to date through June and peaked at $45 billion in assets on July 1, thanks to concentrated bets on public and private AI stocks – and shorting ones perceived to be victims of AI, such as software stocks like Adobe (ADBE).
But when his stocks started moving against him, Aschenbrenner – whose fund was reportedly leveraged five times – got hit with margin calls. He had to scramble to unwind his positions and try to raise money (see this Financial Times article).
He failed to do so and had to sell the bulk of his holdings to hedge-fund giant Citadel, as this [Wall Street Journal] article reports.
As a result, Aschenbrenner's fund has crashed 67% this month, causing him to write to his investors (in the understatement of the year): "We let you down this month."
What a story of greed, hubris, stupidity, and a total failure of risk management! Too bad Charlie Munger isn't around to analyze this – he would have had a field day with it...
It's always leverage (or credit)...
As Whitney wrote…
The lessons here for everyday investors are simple: It's OK to invest in risky/speculative stocks or sectors, but recognize what you're doing, and keep position sizes and total exposures small. And don't use leverage!
Being wrong doesn't help, either. Yesterday, Whitney shared excerpts of what our founder Porter Stansberry wrote recently on X about the blowup of Aschenbrenner's AI hedge fund.
Porter wrote that while the fund "blew up quickly because of leverage," it "failed because he is simply wrong" about the idea that many software companies will be victims of AI.
Porter used Microsoft (MSFT) and Veeva Systems (VEEV) as examples of software companies that offer products that can't be replaced by AI. Not only that, but the applications they provide – and their balance sheets – are also benefiting from AI. Porter wrote...
These software companies are computing toll booths: they're what enterprises pay to implement compute. And, as compute gets cheaper, they will generate vastly more revenue, not less. The proof is sitting there in their earnings and cash flows: they're riding on lower and lower cost of compute, which makes their business more and more efficient.
Whitney says he "couldn't agree more," which is why he has written favorably about companies like Adobe, Intuit (INTU), and Salesforce (CRM)... and why Microsoft and Software as a Service ("SaaS") provider ServiceNow (NOW) are open recommendations in our flagship newsletter, Stansberry's Investment Advisory.
In the latest issue, Whitney and the team published a new recommendation that operates in this space – a well-positioned cybersecurity company that could boost its revenue at a 20% compound annual growth rate over the next five years... and see its stock price soar.
Existing Investment Advisory subscribers and Stansberry Alliance members have access to the issue and buy advice, as well as our entire archive and portfolio of recommendations, here. If you want to join them, click here to learn more and get started with a subscription today.
New 52-week highs (as of 8/3/26): Amazon (AMZN), Bristol-Myers Squibb (BMY), Chemed (CHE), Dexcom (DXCM), iShares MSCI Spain Fund (EWP), Series B Depositary Shares of Alphabet's 6.25% Mandatory Convertible Preferred Stock (GOOGN), Global X MSCI Greece Fund (GREK), Garmin (GRMN), VanEck Morningstar Wide Moat Fund (MOAT), and Match Group (MTCH).
In today's mailbag, a thank-you note – which we always appreciate – plus thoughts on sickening lettuce, which we wrote about yesterday... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"Just a quick note to say thanks Corey for always putting so much info into the Digest. You do a great job!" – Subscriber Francis M.
Corey McLaughlin comment: Thanks for the note. We appreciate it. It's funny, this note came in a day after I submitted a draft issue that needed some heavy editing. It's not just me. We have a great team here who cares about our products and subscribers.
"How many times do we have to be terrorized by eating lettuce before the FDA steps in and establishes better checks in the supply chains? This is ridiculous. If it's not one case of this crap it's another case of something else! What good are these government agencies, if the bugs get into our food anyway?" – Subscriber Jon M.
All the best,
Corey McLaughlin
Baltimore, Maryland
August 4, 2026
